AHDB is in advanced talks with private business HallMark Veterinary Compliance Services about taking over its commercial meat classification subsidiary
The levy body said the move was necessary to secure the long term future of independent classification services for farmers across Great Britain and was in response to a challenging business environment and the need to respond to new technology classification systems such as VIA.
AHDB believes that by moving the business, Meat and Livestock Commercial Services Limited (MLCSL), into the private sector with a company that has a strong track record of delivering independent services to the meat industry, it will open up opportunities for greater efficiencies and synergies. These would not be possible under the current public ownership model and secure the future of the business, which has a turnover of £4 million, it said.
AHDB has undertaken a year long process to identify suitable companies that met robust criteria set down by the AHDB Board, including value for money, track record of delivering independent verification services to the meat industry and commitment to the long term future of the business.
After an exhaustive bidding process involving a large number of interested parties, AHDB has now moved to the final phase of negotiations with HallMark and it is hoped that a deal will be completed by the summer.
AHDB chief executive Jane King said: “MLCSL is facing an increasingly challenging business environment and we believe that this move will help secure its future.
“We believe that there will be synergies and efficiencies realised under commercial ownership that would just not be possible under the current public ownership model.
“These will be vital in securing the short term prospects of the business and freeing up investment for the future.
“In selecting the final bidder, the AHDB Board put a strong emphasis on HallMark’s track record of delivering independent services for Government and the meat industry as it is essential that farmers continue to have confidence in the classification services supplied by MLCSL in the future.”
HallMark chairman David Peace added: “We are extremely pleased to have been selected by AHDB as the organisation with which they will hold exclusive discussions about taking over its subsidiary, MLCSL.
“As a key contractor to government departments for statutory farm inspections and Official Controls in abattoirs, we pride ourselves on HallMark’s independence, integrity and expertise. It is therefore clear to us that MLCSL’s outstanding reputation in all these regards will help us to further strengthen our own position, as well as fulfil our overall strategic objective to diversify and grow our operational capacity towards ever-improving efficiencies for our customers.”
- MLCSL, based at Stoneleigh Park, Warwickshire, in AHDB’s headquarters, provides independent carcase classification services as well as data, advice, equipment and labels to the red meat industry.
- The principal (85% of turnover in 2016/17) activity of the company is to provide independent carcase classification experts (authentication services) into red meat abattoirs to classify cattle and sheep and grade pig carcases against specifications, which forms the basis of the subsequent payment to the farmer.
- It employs more than 100 people across Great Britain
- MLCSL provides authentication services to 44 meat processing plants
Why Hallmark was selected
The ability to deliver classification services that continued to be independent was one of the key criteria AHDB used in selecting final bids.
HallMark has considerable experience in providing Official Veterinarians and Meat Hygiene Inspectors in the UK, contracted to Food Standards Scotland (FSS) and Food Standards Agency (FSA). The company also has a track record of successfully delivering a number of public sector farm inspections on behalf of the Rural Payments Agency (RPA) and Animal and Plant Health Agency (APHA).
HallMark has had to demonstrate consistently its integrity and its ability to provide independent services to secure these contracts, AHDB said.
The Rural Payments Agency (RPA) will continue to provide robust oversight of classification services for both the Beef Carcase Classification (BCC) scheme and the Pig Carcase Grading (PCG) scheme going forward.
Under the PCG scheme, RPA inspectors visit abattoirs and check that carcases have been weighed, dressed and graded correctly. RPA inspectors have the power to carry out follow up visits and take enforcement action taken against the abattoir if standards are not being met.